EXECUTION VERSION

 

LOAN SALE AGREEMENT

 

March 21, 2012,

 

between

 

GENERAL ELECTRIC CAPITAL CORPORATION,
as Seller

 

and

CEF EQUIPMENT HOLDING, L.L.C.,
as Purchaser

 

Loan Sale Agreement

 

 

This LOAN SALE AGREEMENT (“Agreement” or “Sale Agreement”) is entered into as of March 21, 2012 by and between GENERAL ELECTRIC CAPITAL CORPORATION, a Delaware corporation (the “Seller”) and CEF EQUIPMENT HOLDING, L.L.C., a Delaware limited liability company (the “Purchaser”).

 

In consideration of the premises and the mutual covenants hereinafter contained, and for other good and valuable consideration, the receipt and sufficiency of which are hereby acknowledged, the parties hereto agree as follows:

 

ARTICLE I

DEFINITIONS AND INTERPRETATION

 

Section 1.1          Definitions. Capitalized terms used herein and not otherwise defined shall have the meanings ascribed to them in Section 1 of Annex A to this Agreement.

 

Section 1.2          Rules of Construction. For purposes of this Agreement, the rules of construction set forth in Section 2 of Annex A shall govern. All Annexes, Exhibits and Schedules hereto, are incorporated herein by reference and, taken together with this Agreement, shall constitute but a single agreement.

 

ARTICLE II

SALES OF CEF ASSETS

 

Section 2.1          Sale of CEF Assets. (a) Subject to the terms and conditions hereof the Seller does hereby sell, transfer, assign, set over and otherwise convey to the Purchaser, without recourse (subject to the obligations herein) all of the Seller’s right, title and interest of in (without duplication):

 

(i)           the Loans and all obligations of the Obligors thereunder, excluding amounts received thereunder prior to or on the Cut-off Date;

 

(ii)          all Related Security and any Collections and additional monies received under the Loans, unless related to amounts due in respect of the Loans on or prior to the Cut-off Date;

 

(iii)         all other property now or hereafter in the possession or custody of, or in transit to, the Issuer, the Servicer, any Sub-Servicer or the Seller relating to any of the foregoing;

 

(iv)         all Loan Files and Records with respect to any of the foregoing; and

 

(v)          all proceeds of the foregoing (all such assets, collectively, the “CEF Assets”).

 

(b)          On or before the Closing Date, the Seller shall (i) indicate in its records that the CEF Assets have been sold to the Purchaser pursuant to this Agreement by so

 

Loan Sale Agreement

  

 

identifying such CEF Assets with an appropriate notation and (ii) deliver to the Purchaser or its designee the following documents (collectively, the “Loan Files”):

 

(i)            the original fully executed copy of the Loan;

 

(ii)          a record or facsimile of the original credit application, if obtained, fully executed by the Obligor;

 

(iii)         the original certificate of title or file stamped copy of the UCC financing statement or such other documents evidencing the security interest of the Purchaser in the Equipment; and

 

(iv)         any and all other material documents relating to a Loan, an Obligor or any of the Equipment.

 

Section 2.2          Grant of Security Interest. The parties hereto intend that the sale pursuant to Section 2.1 hereof shall constitute a purchase and sale and not a loan. Notwithstanding anything to the contrary set forth in this Section 2.2, if a court of competent jurisdiction determines that the sale provided for herein constitutes a loan and not a purchase and sale, then the parties hereto intend that this Agreement shall constitute a security agreement under applicable law and that the Seller shall be deemed to have granted, and the Seller hereby grants, to the Purchaser a first priority lien and security interest in and to all of the Seller’s right, title and interest in, to and under the CEF Assets sold and transferred by the Seller on the Closing Date. The possession by the Purchaser of notes and such other goods, money, documents, chattel paper or certificated securities shall be deemed to be “possession by or delivery to the secured party” for purposes of perfecting the security interest pursuant to the UCC in force in the relevant jurisdiction (including, without limitation, Section 9-313(c)(1) thereof). Notifications to persons holding such property, and acknowledgments, receipts or confirmations from persons holding such property, shall be deemed notifications to, or acknowledgments, receipts or confirmations from, bailees or agents (as applicable) of the Purchaser for the purpose of perfecting such security interest under applicable law (except that nothing in this sentence shall cause any Person to be deemed to be an agent of the Purchaser for any purpose other than for perfection of such security interest unless, and then only to the extent, expressly appointed and authorized by the Purchaser in writing).

 

Section 2.3          Sale Price. On the Closing Date, the Purchaser shall, upon satisfaction of the applicable conditions set forth in Article III, pay the CEF Purchase Price in the form of (i) cash and (ii) an increase in the Seller’s equity interest in the Purchaser (together, the “CEF Purchase Price”) as consideration for the CEF Assets sold and transferred by the Seller to the Purchaser pursuant to Section 2.1 hereof, which CEF Purchase Price shall be acknowledged by the Seller and the Purchaser to be the fair market value thereof.

 

Loan Sale Agreement

 

 

ARTICLE III

 

CONDITIONS PRECEDENT

 

Section 3.1          Conditions to Sale. Each sale hereunder shall be subject to satisfaction of each of the following conditions precedent (any one or more of which, except clause (e) below, may be waived in writing by the Purchaser) as of the Closing Date:

 

(a)         This Agreement or counterparts hereof shall have been duly executed by, and delivered to, the Seller and the Purchaser, and the Purchaser shall have received such documents, instruments, agreements and legal opinions as the Purchaser shall reasonably request in connection with the transactions contemplated by this Agreement, each in form and substance reasonably satisfactory to the Purchaser.

 

(b)         The Purchaser shall have received satisfactory evidence that the Seller has obtained all required consents and approvals of all Persons, including all requisite Governmental Authorities, to the execution, delivery and performance of this Agreement and the consummation of the transactions contemplated hereby.

 

(c)         The Seller shall be in compliance in all material respects with all applicable foreign, federal, state and local laws and regulations, including those specifically referenced in Section 4.2(c), except to the extent that the failure to so comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

(d)         The representations and warranties of the Seller contained herein or in any other Related Document shall be true and correct in all material respects (or, to the extent any such representation or warranty is qualified by a materiality standard, such representation or warranty shall be true and correct) as of the Closing Date, both before and after giving effect to such sale, except to the extent that any such representation or warranty expressly relates to an earlier date and except for changes therein expressly permitted by this Agreement.

 

(e)         At the time of such sale, the Purchaser shall have sufficient funds on hand to pay the CEF Purchase Price.

 

(f)         The Seller shall be in compliance, in all material respects, with each of its covenants and other agreements set forth herein.

 

(g)         The Seller shall have taken such other action, including delivery of approvals, consents, opinions, documents and instruments to the Purchaser as the Purchaser may reasonably request.

 

The consummation by the Seller of the sale of CEF Assets on the Closing Date shall be deemed to constitute, as of the Closing Date, a representation and warranty by the Seller that the conditions in clauses (d), (f) and (g) of this Section 3.1 have been satisfied.

 

Loan Sale Agreement

 

 

ARTICLE IV

 

REPRESENTATIONS, WARRANTIES AND COVENANTS

 

Section 4.1          Representations and Warranties of the Seller. To induce the Purchaser to purchase the CEF Assets, the Seller makes the following representations and warranties to the Purchaser, as of the Closing Date, each and all of which shall survive the execution and delivery of this Agreement.

 

(a)         Corporate Existence; Power and Authority. The Seller (i) is a corporation duly organized, validly existing and in good standing under the laws of its jurisdiction of organization; and (ii)  has all requisite power and authority and licenses to conduct its business, to own its properties and to execute, deliver and perform its obligations under this Agreement.

 

(b)         UCC Information. The true legal name of the Seller as registered in the jurisdiction of its organization, and the current location of the Seller’s jurisdiction of organization are set forth in Schedule 4.1(b) and such location has not changed within the past twelve (12) months with respect to the Seller. During the prior five (5) years, except as set forth in Schedule 4.1(b), the Seller has not been known as or used any corporate, fictitious or trade name. In addition, Schedule 4.1(b) lists the Seller’s (i) federal employer identification number and (ii) organizational identification number as designated by the jurisdiction of its organization.

 

(c)         Authorization, Compliance with Law. The execution, delivery and performance by the Seller of this Agreement and the other Related Documents and the creation and perfection of all Liens and ownership interests provided for herein: (i) have been duly authorized by all necessary corporate action, and (ii) do not violate any provision of any law or regulation of any Governmental Authority, or contractual or corporate restrictions, binding on the Seller, except where such violations, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

(d)         Enforceability. On or prior to the Closing Date, each of the Related Documents to which the Seller is a party shall have been duly executed and delivered by the Seller and each such Related Document shall then constitute a legal, valid and binding obligation of the Seller, enforceable against it in accordance with its terms, subject as to enforcement to bankruptcy, receivership, conservatorship, insolvency, reorganization, moratorium and other similar laws of general applicability relating to or affecting creditors’ rights and to general principles of equity.

 

(e)         Solvency. The Seller is Solvent.

 

(f)         Use of Proceeds. No proceeds received by the Seller under this Agreement will be used by it for any purpose that violates Regulation U of the Federal Reserve Board.

 

Loan Sale Agreement

 

 

(g)         Investment Company Act. The Seller is not an “investment company” or “controlled by” an “investment company,” as such terms are defined in the Investment Company Act.

 

(h)         Loans and Other CEF Assets. With respect to each Loan and the other CEF Assets sold by the Seller on the Closing Date, the Seller represents and warrants that (i) such Loan satisfies the criteria for an Eligible Loan as of the Cut-off Date; (ii) immediately prior to sale to the Purchaser, such CEF Assets were owned by the Seller free and clear of any Adverse Claim, and the Seller has had at all relevant times the full right, power and authority to sell, contribute, assign, transfer and pledge its interest therein as contemplated under this Agreement and, upon such sale, the Purchaser will acquire valid and properly perfected title to, and the sole record and beneficial ownership interest in, such CEF Assets, free and clear of any Adverse Claim or restrictions on transferability, and the Liens granted to the Purchaser by the Seller pursuant to Section 2.2 will at all times be fully perfected first priority Liens in and to such Loans and, in addition, following such sale, such Loan will not be subject to any Adverse Claim as a result of any action or inaction on the part of the Seller (or any predecessor in interest); and (iii) if such Loan is cross-collateralized with a receivable that is not a CEF Asset conveyed hereunder, as of the Closing Date, either (x) the repossession or exercise of other rights with respect to the related Equipment by the holder of such receivable that is not a CEF Asset would not materially impair the security intended to be afforded for such Loan and result in a material adverse effect on the holders of the Notes or (y) the holder of such receivable and the Purchaser or its assigns as holder of the Loan have entered into an intercreditor arrangement under which each holder has agreed to subordinate its respective lien and rights of enforcement against the Equipment financed by the other holder or its predecessor in interest.

 

The representations and warranties described in this Section 4.1 shall survive the sale of the CEF Assets to the Purchaser, any subsequent assignment or sale of the CEF Assets by the Purchaser, and the termination of this Agreement and the other Related Documents and shall continue until the payment in full of all CEF Assets.

 

Section 4.2          Affirmative Covenants of the Seller. The Seller covenants and agrees that, unless otherwise consented to by the Purchaser, from and after the Closing Date and until the earlier of the Redemption Date or the Class C Maturity Date:

 

(a)           Records. The Seller shall at its own cost and expense, for not less than three years from the date on which each Loan was originated, or for such longer period as may be required by law, maintain adequate Records with respect to such Loan, including records of all payments received, credits granted and merchandise returned with respect thereto.

 

(b)            Access. At any reasonable time, and from time to time at the Purchaser’s reasonable request, and upon at least seven (7) days prior notice to the Seller, the Seller shall permit the Purchaser (or such Person as the Purchaser may designate), at the expense of the Purchaser (or such Person as the Purchaser may designate), to conduct audits or visit and inspect any of the properties of the Seller to examine the records,

 

Loan Sale Agreement

 

 

internal controls and procedures maintained by the Seller with respect to the CEF Assets and take copies and extracts therefrom, and to discuss the Seller’s affairs with its officers, employees and, upon notice to the Seller, independent accountants. The Seller shall authorize such officers, employees and independent accountants to discuss with the Purchaser (or such Person as the Purchaser may designate) the affairs of the Seller as such affairs relate to the CEF Assets. Any audit provided for herein shall be conducted in accordance with the Seller’s rules respecting safety and security on its premises and without materially disrupting operations. If an Event of Default shall have occurred and be continuing, the Seller shall provide such access at all times and without advance notice and shall provide the Purchaser (or such Person as the Purchaser may designate) with access to its suppliers and customers.

 

(c)           Compliance With Agreements and Applicable Laws. The Seller shall comply with all federal, state and local laws and regulations applicable to it and the CEF Assets, including those relating to truth in lending, fair credit billing, fair credit reporting, equal credit opportunity, fair debt collection practices, privacy, licensing and taxation, except to the extent that the failure to so comply, individually or in the aggregate, could not reasonably be expected to have a Material Adverse Effect.

 

(d)           Maintenance of Existence and Conduct of Business. The Seller shall preserve and maintain its corporate existence, rights, franchise and privileges in the jurisdiction of its incorporation; provided, that (i) the Seller may change its jurisdiction of organization upon thirty (30) days’ notice to the Purchaser, and upon taking all actions necessary to maintain the perfected ownership interest of the Purchaser in the Purchased Assets and (ii) the Seller may merge or consolidate with, or convey substantially all of its assets to, any Person, so long as such Person assumes the Seller’s obligations under this Agreement, either contractually or by operation of law.

 

(e)           Notice of Material Event. The Seller shall promptly inform the Purchaser in writing of the occurrence of any of the following, in each case setting forth the details thereof and what action, if any, the Seller proposes to take with respect thereto:

 

(i)           any Litigation commenced, or to the knowledge of the Seller, threatened against it or with respect to or in connection with all or any substantial portion of the CEF Assets or developments in such Litigation in each case that the Seller believes has a reasonable risk of being determined adversely to it and that could, if determined adversely, have a Material Adverse Effect on the Seller or the Purchaser; or

 

(ii)          the commencement of a case or proceeding by or against the Seller seeking a decree or order in respect to it (A) under the Bankruptcy Code or any other applicable federal, state or foreign bankruptcy or other similar law, (B) appointing a custodian, receiver, liquidator, assignee, trustee or sequestrator (or similar official) for the Seller or for any substantial part of the Seller’s assets, or (C) ordering the winding-up or liquidation of the affairs of the Seller.

 

Loan Sale Agreement

 

 

(f)           Separate Identity. The Seller shall, to the extent applicable to it, act in a manner that is consistent with the statements set forth in Exhibit 4.2(f).

 

(g)           Deposit of Collections. The Seller shall transfer and cause its Subsidiaries to transfer to the Purchaser or the Servicer on its behalf, promptly, and in any event no later than the second (2^nd) Business Day after receipt thereof, all Collections it may receive in respect of CEF Assets.

 

Section 4.3           Negative Covenants of the Seller. The Seller covenants and agrees that, without the prior written consent of the Purchaser, from and after the Closing Date and until the earlier of the Redemption Date or the Class C Maturity Date:

 

(a)           Adverse Claims. The Seller shall not create, incur, assume or permit to exist any Adverse Claim on or with respect to any CEF Assets.

 

(b)           Modifications of Loans. The Seller shall not extend, amend, forgive, discharge, compromise, cancel, waive or otherwise modify the terms or conditions of any Loan except (i) as permitted under the Servicing Agreement and, (ii) to the extent that such extension, amendment, forgiveness, discharge, compromise, cancellation, waiver or modification, does not affect the Purchaser’s ownership interest in such Loan and does not negatively impact the ultimate collectability of such Loan.

 

(c)           UCC Matters. The Seller shall not change its state of organization or incorporation or its name, identity or corporate structure such that any financing statement filed to perfect the Purchaser’s interests under this Agreement would become seriously misleading, unless the Seller shall have given the Purchaser not less than thirty (30) days’ prior written notice of such change.

 

(d)           No Proceedings. From the Closing Date and until the date one (1) year plus one (1) day following the date on which all amounts due with respect to the Notes have been paid in full in cash, the Seller shall not, directly or indirectly, institute or cause to be instituted against the Purchaser any bankruptcy, reorganization, arrangement, insolvency or liquidation proceeding or other proceeding under any federal or state bankruptcy or similar law; provided that the foregoing shall not in any way limit the Seller’s right to pursue any other creditor rights or remedies that the Seller may have under applicable law.

 

ARTICLE V

 

INDEMNIFICATION

 

Section 5.1          Indemnification. Without limiting any other rights that the Purchaser or any of its Stockholders, officers, directors, employees, attorneys, agents or representatives or assigns (each, a “Purchaser Indemnified Person”) may have hereunder or under applicable law, the Seller hereby agrees to indemnify and hold harmless each Purchaser Indemnified Person from and against any and all Indemnified Amounts that may be claimed or asserted against or incurred by any such Purchaser Indemnified Person to the extent arising from or related to the failure of a Loan sold and transferred by the Seller to be originated in compliance with all

 

Loan Sale Agreement

 

 

requirements of law; provided, that the Seller shall not be liable for any indemnification to a Purchaser Indemnified Person to the extent that any such Indemnified Amounts result from (a) such Purchaser Indemnified Person’s bad faith, gross negligence or willful misconduct, (b) recourse for uncollectible Loans, or (c) any income tax or franchise tax incurred by any Purchaser Indemnified Person, except to the extent that the incurrence of any such tax results from a breach of or default by the Seller under this Agreement.

 

NO PARTY TO THIS AGREEMENT SHALL BE RESPONSIBLE OR LIABLE TO ANY OTHER PARTY TO THIS AGREEMENT, ANY SUCCESSOR, ASSIGNEE OR THIRD PARTY BENEFICIARY OF SUCH PERSON OR ANY OTHER PERSON ASSERTING CLAIMS DERIVATIVELY THROUGH SUCH PARTY, FOR INDIRECT, PUNITIVE, EXEMPLARY OR CONSEQUENTIAL DAMAGES THAT MAY BE ALLEGED AS A RESULT OF ANY TRANSACTION CONTEMPLATED HEREUNDER.

 

ARTICLE VI

 

MISCELLANEOUS

 

Section 6.1          Notices. Except as otherwise provided herein, whenever it is provided herein that any notice, demand, request, consent, approval, declaration or other communication shall or may be given to or served upon any of the parties by any other parties, or whenever any of the parties desires to give or serve upon any other parties any communication with respect to this Agreement, each such notice, demand, request, consent, approval, declaration or other communication shall be in writing and shall be deemed to have been validly served, given or delivered (a) upon the earlier of actual receipt and three (3) Business Days after deposit in the United States mail, registered or certified mail, return receipt requested, with proper postage prepaid, (b) upon transmission, when sent by telecopy or other similar facsimile transmission (with such telecopy or facsimile promptly confirmed by delivery of a copy by personal delivery or United States mail as otherwise provided in this Section 6.1), (c) one Business Day after deposit with a reputable overnight courier with all charges prepaid or (d) when delivered, if hand-delivered by messenger, all of which shall be addressed to the party to be notified and sent to the address or facsimile number set forth below or to such other address (or facsimile number) as may be substituted by notice given as herein provided. The giving of any notice required hereunder may be waived in writing by the party entitled to receive such notice. Failure or delay in delivering copies of any notice, demand, request, consent, approval, declaration or other communication to any Person (other than the Purchaser) designated in any written communication provided hereunder to receive copies shall in no way adversely affect the effectiveness of such notice, demand, request, consent, approval, declaration or other communication. Notwithstanding the foregoing, whenever it is provided herein that a notice is to be given to any other party hereto by a specific time, such notice shall be effective only if actually received by such party prior to such time, and if such notice is received after such time or on a day other than a Business Day, such notice shall be effective only on the immediately succeeding Business Day.

 

Loan Sale Agreement

 

 

If to Seller:

 

General Electric Capital Corporation

201 Merritt 7

Norwalk, Connecticut 06851

Attention: General Counsel

Telephone: (203) 229-5000

Facsimile: (203) 956-4296

 

If to Purchaser:

 

CEF Equipment Holding, L.L.C.

10 Riverview Drive

Danbury, CT 06810

Attention: Capital Markets Operations

Telephone: (203) 749-2101

Facsimile: (203) 749-4054

 

Section 6.2          No Waiver; Remedies. (a) Any party’s failure, at any time or times, to require strict performance by any other party hereto of any provision of this Agreement shall not waive, affect or diminish any right of such party thereafter to demand strict compliance and performance herewith. Any suspension or waiver of any breach or default hereunder shall not suspend, waive or affect any other breach or default whether the same is prior or subsequent thereto and whether of the same or a different type. None of the undertakings, agreements, warranties, covenants and representations of any party contained in this Agreement, and no breach or default by any party hereunder, shall be deemed to have been suspended or waived by any other party hereto unless such waiver or suspension is by an instrument in writing signed by an officer of or other duly authorized signatory of such party and directed to the defaulting party specifying such suspension or waiver.

 

(b)         Upon discovery by the Seller or the Purchaser of any breach of any representation, warranty, undertaking or covenant made by such party and described in Sections 4.1, 4.2 or 4.3, which breach is reasonably likely to have a Material Adverse Effect on the applicable CEF Assets, the party discovering the same shall give prompt written notice thereof to the other parties hereto. As liquidated damages, the Purchaser shall, on the Transfer Date relating to the Collection Period during which the breach is discovered, request the Seller to, and the Seller shall pay to, or at the direction of, the Purchaser the Purchase Amount for the applicable CEF Assets (measured at the end of the Collection Period during which such breach is discovered). Upon such payment, all rights, title and interest of the Purchaser in and to such CEF Assets will be deemed to be automatically released without the necessity of any further action by the Purchaser, the Seller or any other party and such CEF Assets will become the property of the Seller.

 

(c)         Each party’s rights and remedies under this Agreement shall be cumulative and nonexclusive of any other rights and remedies that such party may have under any other agreement, including the other Related Documents, by operation of law or otherwise.

 

Loan Sale Agreement

 

 

Section 6.3          Successors and Assigns. This Agreement shall be binding upon and shall inure to the benefit of the Seller and the Purchaser and their respective successors and permitted assigns, except as otherwise provided herein. The Seller may not assign, transfer, hypothecate or otherwise convey its rights, benefits, obligations or duties hereunder without the prior express written consent of the Purchaser. Any such purported assignment, transfer, hypothecation or other conveyance by the Seller without the prior express written consent of the Purchaser shall be void. The Seller acknowledges that under the Purchase and Sale Agreement the Purchaser will assign its rights granted hereunder to the Issuer, and upon such assignment, the Issuer shall have, to the extent of such assignment, all rights of the Purchaser hereunder and the Issuer may in turn transfer such rights. The terms and provisions of this Agreement are for the purpose of defining the relative rights and obligations of the Seller and the Purchaser with respect to the transactions contemplated hereby and no Person shall be a third-party beneficiary of any of the terms and provisions of this Agreement.

 

Section 6.4          Termination; Survival of Obligations. (a) This Agreement shall create and constitute the continuing obligations of the parties hereto in accordance with its terms, and shall remain in full force and effect until the earlier of (i) the Class C Maturity Date or (ii) the Redemption Date.

 

(b)         Except as otherwise expressly provided herein or in any other Related Document, no termination or cancellation (regardless of cause or procedure) of any commitment made by the Purchaser under this Agreement shall in any way affect or impair the obligations, duties and liabilities of the Seller or the rights of the Purchaser relating to any unpaid portion of any and all recourse and indemnity obligations of the Seller to the Purchaser, due or not due, liquidated, contingent or unliquidated or any transaction or event occurring prior to such termination, or any transaction or event, the performance of which is required after the earlier to occur of the Redemption Date or the Class C Maturity Date. Except as otherwise expressly provided herein or in any other Related Document, all undertakings, agreements, covenants, warranties and representations of or binding upon the Seller, and all rights of the Purchaser hereunder shall not terminate or expire, but rather shall survive any such termination or cancellation and shall continue in full force and effect until the earlier of (i) the Class C Maturity Date or (ii) the Redemption Date; provided, that the rights and remedies pursuant to Section 6.2(b), the indemnification and payment provisions of Article V, and the provisions of Sections 4.3(c), 6.3, 6.4(b), 6.12 and 6.15 shall be continuing and shall survive any termination of this Agreement.

 

Section 6.5          Complete Agreement; Modification of Agreement. This Agreement constitutes the complete agreement between the parties with respect to the subject matter hereof, supersedes all prior agreements and understandings relating to the subject matter hereof and thereof, and may not be modified, altered or amended except as set forth in Section 6.6.

 

Section 6.6          Amendments and Waivers. No amendment, modification, termination or waiver of any provision of this Agreement, or any consent to any departure therefrom by any party hereto, shall in any event be effective unless the same shall be in writing and signed by each of the parties hereto and their respective permitted successors and assigns. No consent or

Loan Sale Agreement

 

 

demand in any case shall, in itself, entitle any party to any other consent or further notice or demand in similar or other circumstances.

 

Section 6.7          Governing Law; Consent to Jurisdiction; Waiver of Jury Trial. (a) THIS AGREEMENT AND THE OBLIGATIONS ARISING HEREUNDER SHALL IN ALL RESPECTS, INCLUDING ALL MATTERS OF CONSTRUCTION, VALIDITY AND PERFORMANCE, BE GOVERNED BY, AND CONSTRUED AND ENFORCED IN ACCORDANCE WITH, THE INTERNAL LAWS OF THE STATE OF NEW YORK (WITHOUT REGARD TO THE CONFLICT OF LAWS PROVISIONS THEREOF EXCEPT SECTIONS 5-1401 AND 5-1402 OF THE GENERAL OBLIGATION LAW) AND ANY APPLICABLE LAWS OF THE UNITED STATES OF AMERICA.

 

(b)         EACH PARTY HERETO HEREBY CONSENTS AND AGREES THAT THE STATE OR FEDERAL COURTS LOCATED IN THE BOROUGH OF MANHATTAN IN NEW YORK CITY SHALL HAVE EXCLUSIVE JURISDICTION TO HEAR AND DETERMINE ANY CLAIMS OR DISPUTES BETWEEN THEM PERTAINING TO THIS AGREEMENT OR TO ANY MATTER ARISING OUT OF OR RELATING TO THIS AGREEMENT; PROVIDED, THAT EACH PARTY HERETO ACKNOWLEDGES THAT ANY APPEALS FROM THOSE COURTS MAY HAVE TO BE HEARD BY A COURT LOCATED OUTSIDE OF THE BOROUGH OF MANHATTAN IN NEW YORK CITY; PROVIDED FURTHER, THAT NOTHING IN THIS AGREEMENT SHALL BE DEEMED OR OPERATE TO PRECLUDE THE PURCHASER FROM BRINGING SUIT OR TAKING OTHER LEGAL ACTION IN ANY OTHER JURISDICTION TO REALIZE ON THE CEF ASSETS OR ANY SECURITY FOR THE OBLIGATIONS OF THE SELLER ARISING HEREUNDER OR TO ENFORCE A JUDGMENT OR OTHER COURT ORDER IN FAVOR OF THE PURCHASER. EACH PARTY HERETO SUBMITS AND CONSENTS IN ADVANCE TO SUCH JURISDICTION IN ANY ACTION OR SUIT COMMENCED IN ANY SUCH COURT, AND EACH PARTY HERETO HEREBY WAIVES ANY OBJECTION THAT SUCH PARTY MAY HAVE BASED UPON LACK OF PERSONAL JURISDICTION, IMPROPER VENUE OR FORUM NON CONVENIENS AND HEREBY CONSENTS TO THE GRANTING OF SUCH LEGAL OR EQUITABLE RELIEF AS IS DEEMED APPROPRIATE BY SUCH COURT. EACH PARTY HERETO HEREBY WAIVES PERSONAL SERVICE OF THE SUMMONS, COMPLAINT AND OTHER PROCESS ISSUED IN ANY SUCH ACTION OR SUIT AND AGREES THAT SERVICE OF SUCH SUMMONS, COMPLAINT AND OTHER PROCESS MAY BE MADE BY REGISTERED OR CERTIFIED MAIL ADDRESSED TO SUCH PARTY AT ITS ADDRESS DETERMINED IN ACCORDANCE WITH SECTION 6.1 AND THAT SERVICE SO MADE SHALL BE DEEMED COMPLETED UPON THE EARLIER OF SUCH PARTY’S ACTUAL RECEIPT THEREOF OR THREE DAYS AFTER DEPOSIT IN THE UNITED STATES MAIL, PROPER POSTAGE PREPAID. NOTHING IN THIS SECTION SHALL AFFECT THE RIGHT OF ANY PARTY HERETO TO SERVE LEGAL PROCESS IN ANY OTHER MANNER PERMITTED BY LAW.

 

Loan Sale Agreement

 

 

(c)         BECAUSE DISPUTES ARISING IN CONNECTION WITH COMPLEX FINANCIAL TRANSACTIONS ARE MOST QUICKLY AND ECONOMICALLY RESOLVED BY AN EXPERIENCED AND EXPERT PERSON AND THE PARTIES WISH APPLICABLE STATE AND FEDERAL LAWS TO APPLY (RATHER THAN ARBITRATION RULES), THE PARTIES DESIRE THAT THEIR DISPUTES BE RESOLVED BY A JUDGE APPLYING SUCH APPLICABLE LAWS. THEREFORE, TO ACHIEVE THE BEST COMBINATION OF THE BENEFITS OF THE JUDICIAL SYSTEM AND OF ARBITRATION, THE PARTIES HERETO WAIVE ALL RIGHT TO TRIAL BY JURY IN ANY ACTION, SUIT, OR PROCEEDING BROUGHT TO RESOLVE ANY DISPUTE, WHETHER SOUNDING IN CONTRACT, TORT OR OTHERWISE, ARISING OUT OF, CONNECTED WITH, RELATED TO, OR INCIDENTAL TO THE RELATIONSHIP ESTABLISHED AMONG THEM IN CONNECTION WITH THIS AGREEMENT OR THE TRANSACTIONS CONTEMPLATED HEREBY.

 

Section 6.8          Counterparts. This Agreement may be executed in any number of separate counterparts, each of which shall collectively and separately constitute one agreement.

 

Section 6.9          Severability. Wherever possible, each provision of this Agreement shall be interpreted in such a manner as to be effective and valid under applicable law, but if any provision of this Agreement shall be prohibited by or invalid under applicable law, such provision shall be ineffective only to the extent of such prohibition or invalidity without invalidating the remainder of such provision or the remaining provisions of this Agreement.

 

Section 6.10        Section Titles. The section titles and table of contents contained in this Agreement are provided for ease of reference only and shall be without substantive meaning or content of any kind whatsoever and are not a part of the agreement between the parties hereto.

 

Section 6.11        No Setoff. None of the Seller’s obligations under this Agreement shall be affected by any right of setoff, counterclaim, recoupment, defense or other right the Seller might have against the Purchaser, all of which rights are hereby expressly waived by the Seller.

 

Section 6.12        Confidentiality. Notwithstanding anything herein to the contrary, there is no restriction (express or implied) on any disclosure or dissemination of the structure or tax aspects of the transaction contemplated by the Related Documents. Furthermore, each party hereto acknowledges that it has no proprietary rights to any tax matter or tax idea contemplated hereby or to any element of the transaction structure contemplated hereby.

 

Section 6.13        Further Assurances. (a) The Seller shall, at its sole cost and expense, upon request of the Purchaser, promptly and duly authorize, execute and/or deliver, as applicable, any and all further instruments and documents and take such further actions that may be necessary or desirable or that the Purchaser may request to carry out more effectively the provisions and purposes of this Agreement or to obtain the full benefits of this Agreement and of the rights and powers herein granted, including authorizing the filing of any financing or continuation statements under the UCC with respect to the ownership interests or Liens granted hereunder. The Seller hereby authorizes the Purchaser to file any such financing or continuation

Loan Sale Agreement

 

 

statements without the signature of the Seller to the extent permitted by applicable law. A carbon, photographic or other reproduction of this Agreement or of any notice or financing statement covering the CEF Assets or any part thereof shall be sufficient as a notice or financing statement where permitted by law. If any amount payable under or in connection with any of the CEF Assets is or shall become evidenced by any instrument, such instrument, other than checks and notes received in the ordinary course of business, shall be duly endorsed in a manner satisfactory to the Purchaser immediately upon the Seller’s receipt thereof and promptly delivered to or at the direction of the Purchaser.

 

(b)         If the Seller fails to perform any agreement or obligation under this Section 6.13, the Purchaser may (but shall not be required to) itself perform, or cause performance of, such agreement or obligation, and the reasonable expenses of the Purchaser incurred in connection therewith shall be payable by the Seller upon demand of the Purchaser.

 

Section 6.14        Accounting Changes. If any Accounting Changes occur and such changes result in a change in the standards or terms used herein, then the parties hereto agree to enter into negotiations in order to amend such provisions so as to equitably reflect such Accounting Changes with the desired result that the criteria for evaluating the financial condition of such Persons and their Subsidiaries shall be the same after such Accounting Changes as if such Accounting Changes had not been made. If the parties hereto agree upon the required amendments to this Agreement, then after appropriate amendments have been executed and the underlying Accounting Change with respect thereto has been implemented, any reference to GAAP contained herein shall, only to the extent of such Accounting Change, refer to GAAP consistently applied after giving effect to the implementation of such Accounting Change. If such parties cannot agree upon the required amendments within thirty (30) days following the date of implementation of any Accounting Change, then all financial statements delivered and all standards and terms used herein shall be prepared, delivered and used without regard to the underlying Accounting Change.

 

Section 6.15        Limitation on Payments. Notwithstanding any provision contained herein to the contrary, if the Purchaser has not received funds which may be used to make payments hereunder as contemplated by the Related Documents, the Purchaser shall not be obligated to make any payments hereunder and any amounts which the Purchaser does not so pay hereunder shall not constitute a claim (as defined in Section 101 of the Bankruptcy Code) against, or limited liability company obligation of the Purchaser for, any such amounts not paid, in each case, unless and until the Purchaser has received funds to make such payments as contemplated by the Related Documents.

 

[Signatures Follow]

 

Loan Sale Agreement 

 

 

IN WITNESS WHEREOF, the parties have caused this LOAN SALE AGREEMENT to be executed by their respective duly authorized representatives, as of the date first above written.

 

	CEF EQUIPMENT HOLDING, L.L.C.
	By:
	Name:
	Title:

 

	GENERAL ELECTRIC CAPITAL
	CORPORATION, as Seller
	By:
	Name:
	Title:

 

Loan Sale Agreement 

 

 

Schedule 4.1(b)

 

UCC INFORMATION

 

General Electric Capital Corporation
True Legal Name:	General Electric Capital Corporation
Jurisdiction of Organization:	Delaware
Executive Offices/Principal Place of Business:	201 Merritt 7
	Norwalk, Connecticut 06851
Collateral Locations:	Danbury, Connecticut
	El Paso, Texas
	Billings, Montana
	Mexico
Trade Names:	GE Capital
FEIN:	13-1500700
Organizational Identification Number:	3174543

 

Loan Sale Agreement 

 

 

Schedule I

 

Schedule of Loans

 

On file with Mayer Brown LLP

 

 Loan Sale Agreement

 

 

Exhibit 4.2(f)

 

SEPARATE IDENTITY PROVISIONS

 

The Purchaser and the Seller have and will continue (in each case, to the extent within its control) to maintain the Purchaser’s separate existence and identity and have and will continue to take all steps necessary to make it apparent to third parties that the Purchaser is an entity with assets and liabilities distinct from those of the Seller or any other Subsidiary or Affiliate of the Seller. In addition to the foregoing, such steps and indicia of the Purchaser’s separate identity include the following:

 

(a)         The Purchaser does and will maintain its own stationery and other business forms separate from those of any other Person (including the Seller), and will conduct business in its own name except that certain Persons may act on behalf of the Purchaser as agents;

 

(b)         The Purchaser maintains and will maintain separate office space of its own as part of its operations, although such space is in a building shared with GE Capital. The corporate records, the other books and records, and the other assets of the Purchaser are and will be segregated from the property of the Seller;

 

(c)         The Seller and the Purchaser will take certain actions to disclose publicly the Purchaser’s separate existence and the transactions contemplated hereby, including through the filing of the UCC Financing Statements. Neither the Seller nor the Purchaser has concealed or will conceal from any interested party any transfers contemplated by the Related Documents;

 

(d)         The Purchaser will not have its own employees, and, as indicated, the Purchaser’s business relating to the CEF Assets may be conducted through agents. However, any allocations of direct, indirect or overhead expenses for items shared between the Purchaser and GE Capital that are not included as part of the Servicing Fee are and will be made among such entities to the extent practical on the basis of actual use or value of services rendered and otherwise on a basis reasonably related to actual use or the value of services rendered;

 

(e)         Except as provided in paragraph (d) above regarding the allocation of certain shared overhead items, the Purchaser does and will pay its own operating expenses and liabilities from its own funds, except GE Capital did and will pay all expenses of the Purchaser incurred in connection with the transactions entered into pursuant to the Related Documents, including those related to the Purchaser’s organization;

 

(f)         Each of the Seller and the Purchaser does and will maintain its assets and liabilities in such a manner that it is not costly or difficult to segregate, ascertain or otherwise identify the Purchaser’s individual assets and liabilities from those of the Seller or from those of any other Person or entity, including any other Subsidiary or Affiliate of the Seller. Except as set forth below, the Purchaser does and will maintain its own books of account and corporate records separate from the Seller or any other Subsidiary or Affiliate of the Seller. Monetary transactions, including those with each other, are and will continue to be properly reflected in their respective financial records. The Purchaser does not and will not commingle or pool its funds or other assets or liabilities with those of the Seller or any other Subsidiary or Affiliate of the Seller except as specifically provided in the Related Documents with respect to the temporary

 

Loan Sale Agreement

 

 

commingling of Collections and with respect to, if applicable, any such Person’s retention, in their capacity as agent or custodian for the Purchaser, of the books and records pertaining to the CEF Assets. However, any such agent or custodian will not generally make the books and records relating to the CEF Assets available to any of creditors or other interested persons of the Purchaser or the Seller. The Purchaser does not and will not maintain joint bank accounts or other depository accounts to which the Seller or any other Subsidiary or Affiliate of the Seller (other than in their capacity as agent for the Purchaser, if applicable) has independent access;

 

(g)         The Purchaser will strictly observe corporate or limited liability company formalities, and the Seller will strictly observe corporate formalities with respect to its dealings with the Purchaser. Specifically, no transfer of assets between the Seller, on the one hand, and the Purchaser, on the other, will be made without adherence to corporate formalities;

 

(h)         The transactions between the Purchaser and the Seller, including the terms governing any servicer advances and the amount and payment of the servicing fee, are on terms and conditions that are consistent with those of arm’s-length relationships. The Seller is not, nor will be, nor holds or will hold itself out to be, responsible for the debts of the Purchaser, except as provided in the representations and warranties made by the Seller (including, if applicable, as a servicer or a sub-servicer) to the Purchaser relating to the CEF Assets and their prior ownership and servicing thereof. The Purchaser will not guaranty the debts of the Seller;

 

(i)         All distributions made by the Purchaser to GE Capital as its sole member shall be in accordance with applicable law;

 

(j)         Any other transactions between the Purchaser and the Seller permitted by (although not expressly provided for in) the Related Documents have been and will be fair and equitable to each of the parties, have been and will be the type of transaction that would be entered into by a prudent Person or entity, and have been and will be on terms that are at least as favorable as may be obtained from a third party Person;

 

(k)         The Purchaser is not named, and has not entered into any agreement to be named, directly or indirectly, as a direct or contingent beneficiary or loss payee on any insurance policy covering the assets of the Seller; and

 

(l)         On balance, the Purchaser has been and will be held out to the public as a separate entity apart from the Seller.

 

* * * * * *

 

Loan Sale Agreement

 

 

ANNEX A

 

to

 

LOAN SALE AGREEMENT

 

dated as of

 

March 21, 2012

 

Annex A to

Loan Sale Agreement

  

 

DEFINITIONS AND INTERPRETATION

 

SECTION 1.         Definitions and Conventions. Capitalized terms used in the Sale Agreement shall have (unless otherwise provided elsewhere therein) the following respective meanings:

 

“Accounting Changes” means, with respect to any Person, an adoption of GAAP different from such principles previously used for reporting purposes by such Person as defined in the Accounting Principles Board Opinion Number 20.

 

“Administration Agreement” means the Administration Agreement, dated as of March 21, 2012, between the Administrator and the Issuer.

 

“Administrator” means GE Capital, in its capacity as Administrator under the Administration Agreement, or any other Person designated as a successor administrator.

 

“Adverse Claim” means any claim of ownership or any Lien, other than any ownership interest or Lien created under the Sale Agreement or the Purchase and Sale Agreement, any Lien created under the Indenture or any Permitted Encumbrances.

 

“Affiliate” means, with respect to any Person, (a) each Person that, directly or indirectly, owns or controls, whether beneficially, or as a trustee, guardian or other fiduciary, five percent (5%) or more of the Stock having ordinary voting power in the election of directors of such Person, (b) each Person that controls, is controlled by, or is under common control with such Person, or (c) each of such Person’s officers, directors, joint venturers and partners. For the purposes of this definition, “control” of a Person means the possession, directly or indirectly, of the power to direct or cause the direction of its management or policies, whether through the ownership of voting securities, by contract or otherwise.

 

“Annual Percentage Rate” or “APR” of a Loan means, the interest rate or annual rate of finance charges stated in or, if not explicitly stated, the implicit finance charges used by the Servicer to determine periodic payments with respect to the related Loan.

 

“Appendices” means, with respect to any Related Document, all exhibits, schedules, annexes and other attachments thereto, or expressly identified thereto.

 

“Bankruptcy Code” means the provisions of Title 11 of the United States Code, 11 U.S.C. §§ 101 et seq. as may be amended from time to time.

 

“Business Day” means any day that is not a Saturday, a Sunday or a day on which banks are required or permitted to be closed in the State of New York or the State of Connecticut.

 

“CEF Assets” is defined in Section 2.1(a) of the Sale Agreement.

 

“CEF Purchase Price” means, with respect to the sale of CEF Assets sold and transferred by the Seller on the Closing Date, the portion of the sale price therefor determined by the Seller and the Purchaser pursuant to Section 2.3.

 

Annex A to

Loan Sale Agreement

 

 

“CEF Limited Liability Company Agreement” means the Second Amended and Restated Limited Liability Company Agreement of the Purchaser dated as of September 25, 2003, as the same may be amended and supplemented from time to time.

 

“Class C Maturity Date” means the Payment Date in January 2020.

 

“Closing Date” means March 21, 2012.

 

“Collection Period” means, for the Seller and with respect to any Payment Date, the Seller’s fiscal month preceding the month in which the Payment Date occurs (or, if for the first Payment Date, the period from and including the day after the Cut-off Date to and including the last day of the fiscal month preceding the fiscal month in which the first Payment Date occurs).

 

“Collections” means, with respect to any Payment Date, the sum (without duplication) of (A) all amounts, whether in the form of cash, checks, drafts, or other instruments, received by the Purchaser, the Issuer or the Servicer in payment or prepayment of, or applied to, any amount owed by an Obligor on account of a Loan during the related Collection Period, including all amounts received on account of such Loan (including interest) and all other fees and charges and (B) any Recoveries received during the related Collection Period.

 

“Consumer Contract” means a contract entered into by an Obligor in connection with a transaction in which the Obligor incurs the related indebtedness primarily for personal, family, or household purposes.

 

“Credit and Collection Policies” or “Credit and Collection Policy” means the policies, practices and procedures adopted by the Issuing Entity on the Closing Date, including the policies and procedures for determining the creditworthiness of Obligors and the extension of credit to Obligors, or relating to the maintenance of those types of loans secured by equipment and collections on such types of loans.

 

“Cut-off Date” means February 4, 2012.

 

“Defaulted Loan” means a Loan with respect to which (i) the Servicer on behalf of the Issuer has repossessed the Equipment securing such Loan or (ii) all or any portion of the Loan Value is deemed uncollectible in accordance with the Credit and Collection Policy.

 

“Dollars” or “$” means lawful currency of the United States of America.

 

“Eligible Loan” means as to each CEF Asset as of the Cut-off Date:

 

(i) Characteristics of CEF Assets. Each CEF Asset: (A) was originated in the United States of America by GE Capital in connection with the financing of Equipment in the ordinary course of business of GE Capital and was fully and properly executed by the parties thereto, (B) has created a valid, subsisting and enforceable first priority security interest (except to the extent the Equipment secures any receivable that is cross-collateralized with such CEF Asset) in the Equipment in favor of GE Capital that, as of the Closing Date, has been assigned by GE Capital to Purchaser, and (C) contains

 

Annex A to

Loan Sale Agreement

  

 

customary and enforceable provisions such that the rights and remedies of the holder thereof are adequate for realization against the collateral of the benefits of the security.

 

(ii) Schedule of CEF Assets. The information set forth on Schedule I, of the Loan Sale Agreement is true and correct in all material respects as of the opening of business on the Cut-off Date and no selection procedures believed by the Seller to be adverse to the interests of the Purchaser were utilized in selecting the CEF Assets. The computer tape regarding the CEF Assets made available to Purchaser and its assigns is true and correct in all material respects.

 

(iii) Compliance with Law. Each CEF Asset and the sale of the related Equipment complied in all material respects at the time it was originated or made and at the execution of this Agreement with all requirements of applicable Federal, State and local laws and regulations thereunder.

 

(iv) Binding Obligation. Each CEF Asset represents the genuine, legal, valid and binding payment obligation in writing of the Obligor, enforceable by the holder thereof in accordance with its terms.

 

(v) No Government Obligor. None of the CEF Assets is due from the United States of America or any State or from any agency, department or instrumentality of the United States of America or any State.

 

(vi) Security Interest in the Equipment. Immediately prior to the sale, assignment and transfer thereof, each CEF Asset shall be secured by a validly perfected first priority security interest (as defined in Section 1-201(37) of the UCC) in the Equipment (except to the extent the Equipment secures any receivable that is cross-collateralized with such CEF Asset) in favor of the Seller as secured party or all necessary and appropriate actions have been commenced that would result in the valid perfection of a first priority security interest in the Equipment in favor of the Seller as secured party.

 

(vii) CEF Assets in Force. No CEF Asset, as of the Cut-off Date, has been satisfied, subordinated or rescinded, nor has any Equipment been released from the Lien granted to secure the related CEF Asset in whole or in part.

 

(viii) No Amendment or Waiver. As of the Cut-off Date, no provision of a CEF Asset has been waived, altered or modified in any respect, except pursuant to a document, instrument or writing included in the Loan Files and no such amendment, waiver, alteration or modification causes such CEF Asset not to be an Eligible Loan.

 

(ix) No Defenses. No right of rescission, setoff, counterclaim or defense has been asserted or threatened or exists with respect to any CEF Asset.

 

(x) Lawful Assignment. As of the Cut-off Date, no CEF Asset has been originated in, or is subject to the laws of, any jurisdiction under which the sale, transfer and assignment of such CEF Asset or any CEF Asset under the Loan Sale Agreement would be unlawful.

 

Annex A to

Loan Sale Agreement

 

 

(xi) All Filings Made. All filings (including UCC filings) necessary in any jurisdiction to give Purchaser a first priority perfected ownership interest in the CEF Asset have been made (except to the extent the Equipment secures any receivable that is cross-collateralized with such CEF Asset).

 

(xii) One Original. There is only one original executed copy of each CEF Asset.

 

(xiii) Insurance. The Obligor on each CEF Asset is required to maintain physical damage insurance covering the Equipment in accordance with GE Capital’s normal requirements.

 

(xiv) No Bankruptcies. No Obligor on any CEF Asset as of the Cut-off Date was noted in the related Loan File as being the subject of a bankruptcy proceeding.

 

(xv) No Repossessions. As of the Cut-off Date, none of the Equipment securing any CEF Asset is in repossession status.

 

(xvi) Instrument or Chattel Paper. Each CEF Asset constitutes an “instrument” or “chattel paper” as defined in the UCC of each State the law of which governs the perfection of the interest granted in it and/or the priority of such perfected interest.

 

(xvii) U.S. Obligors. None of the CEF Assets is denominated and payable in any currency other than United States Dollars or is due from any Person that does not have a mailing address in the United States of America.

 

(xviii) No Delinquent Loan. None of the CEF Assets is more than thirty (30) days past due.

 

(xix) No Consumer Contract. None of the CEF Assets constitutes a Consumer Contract.

 

“Equipment” means primarily any transportation equipment, together with all accessions thereto securing an Obligor’s indebtedness under such Obligor’s Loan.

 

“Equipment Loan” means middle market equipment loans that consist of loans made to obligors in the United States of America primarily secured by new or used transportation equipment and managed by the Equipment Finance reporting category of the Commercial Lending and Leasing division of GE Capital.

 

“Event of Default” is defined in Section 5.1 of the Indenture.

 

“Federal Reserve Board” means the Board of Governors of the Federal Reserve System.

 

“GAAP” means generally accepted accounting principles in the United States of America as in effect on the Closing Date, modified by Accounting Changes as GAAP is further defined in Section 2(a) of this Annex A.

 

“GE Capital” is defined in the preamble of the Sale Agreement.

 

Annex A to

Loan Sale Agreement

 

 

“Governmental Authority” means any nation or government, any state, county, city, town, district, board, bureau, office, commission, any other municipality or other political subdivision thereof (including any educational facility, utility or other Person operated thereby), and any agency, department or other entity exercising executive, legislative, judicial, regulatory or administrative functions of or pertaining to government.

 

“Indemnified Amounts” means, with respect to any Person, any and all suits, actions, proceedings, claims, damages, losses, liabilities and expenses (including reasonable attorneys’ fees and disbursements and other costs of investigation or defense, including those incurred upon any appeal).

 

“Indenture” means the Indenture, dated March 21, 2012, between the Issuer and the Indenture Trustee, as the same may be amended and supplemented from time to time.

 

“Indenture Trustee” means Citibank, N.A., not in its individual capacity but solely as Indenture Trustee under the Indenture, or any successor Indenture Trustee under the Indenture.

 

“Intercreditor Agreement” means the Intercreditor Agreement, dated as of March 21, 2012, between the Issuer and GE Capital, as may be amended or supplemented from time to time.

 

“Investment Company Act” means the provisions of the Investment Company Act of 1940, 15 U.S.C. §§ 80a et seq., and any regulations promulgated thereunder.

 

“Issuer” means GE Equipment Transportation LLC, Series 2012-1, a Delaware limited liability company, until a successor replaces it and, thereafter, means the successor and, for purposes of any provision contained in the Indenture and required by the Trust Indenture Act of 1939, each other obligor on the Notes.

 

“Issuer Limited Liability Company Agreement” means the Limited Liability Company Agreement of the Issuer, dated as of March 21, 2012, among the Managing Member and the Issuer, as the same may be amended or supplemented from time to time.

 

“Lien” means a security interest (as such term is defined in Section 1-201 of Article 1 of the UCC), lien, charge, pledge, equity or encumbrance of any kind, other than tax liens, mechanics’ liens and any liens that attach to the related Loan by operation of law as a result of any act or omission by the related Obligor.

 

“Litigation” means, with respect to any Person, any action, claim, lawsuit, demand, investigation or proceeding pending or threatened against such Person before any court, board, commission, agency or instrumentality of any federal, state, local or foreign government or of any agency or subdivision thereof or before any arbitrator or panel of arbitrators.

 

“Loan” means any loan included in Schedules of Loans and any agreement (including any invoice) pursuant to, or under which, an Obligor shall be obligated to make payments with respect to any Equipment Loan owned by the Issuer.

 

“Loan Files” is defined in Section 2.1 of the Sale Agreement.

 

Annex A to

Loan Sale Agreement

 

 

“Loan Value” means for any Loan that is not a Defaulted Loan on any day (including the Cut-off Date) (A) with respect to Precomputed Loans, (i) the present value of the future Scheduled Payments discounted monthly at its APR plus (ii) any past due Scheduled Payments reflected on the Servicer’s records plus (iii) the unamortized amounts of any purchase premiums minus (iv) the unamortized amounts of any purchase discounts and (B) with respect to Simple Interest Loans, (i) the balance reflected on the Servicer’s records plus (ii) the unamortized amounts of any purchase premiums minus (iii) the unamortized amounts of any purchase discounts. A Defaulted Loan shall be deemed to have a Loan Value equal to the outstanding Loan Value at the time it became a Defaulted Loan less the amount written-off as uncollectible in accordance with the Credit and Collection Policy.

 

“Managing Member” means CEF Equipment Holding, L.L.C., a Delaware limited liability company or any successor Managing Member under the Issuer Limited Liability Company Agreement.

 

“Material Adverse Effect” means, with respect to any Person, a material adverse effect on (a) the business, assets, liabilities, operations, prospects or financial or other condition of such Person, (b) the ability of such Person to perform any of its obligations under the Related Documents in accordance with the terms thereof, (c) the validity or enforceability of any Related Document or the rights and remedies of such Person under any Related Document or (d) the Loans, as applicable, therefor, any interest related thereto or the ownership interests or Liens of such Person thereon or the priority of such interests or Liens, in each case which affects the Loans, any interest related thereto or the ownership interests or Liens of such Person thereon or the priority of such interests or Liens taken as a whole.

 

“Notes” means the notes issued under the Indenture.

 

“Obligor” means, as to each Loan, any Person who owes payments under a Loan.

 

“Payment Date” means, with respect to each Collection Period, the 22nd day of the calendar month following the end of that Collection Period, or, if such day is not a Business Day, the next Business Day, commencing on April 23, 2012.

 

“Permitted Encumbrances” means the following encumbrances: (a) Liens for taxes or assessments or other governmental charges not yet due and payable; (b) pledges or deposits securing obligations under workmen’s compensation, unemployment insurance, social security or public liability laws or similar legislation; (c) pledges or deposits securing bids, tenders, contracts (other than contracts for the payment of money) or leases to which the Seller or any Affiliate thereof is a party as lessee made in the ordinary course of business; (d) deposits securing statutory obligations of the Seller or any Affiliate thereof; (e) inchoate and unperfected workers’, mechanics’, suppliers’ or similar Liens arising in the ordinary course of business; (f) carriers’, warehousemen’s or other similar possessory Liens arising in the ordinary course of business and securing liabilities in an outstanding aggregate amount not in excess of $100,000 at any one time; (g) deposits securing, or in lieu of, surety, appeal or customs bonds in proceedings to which the Seller or any Affiliate thereof is a party; (h) any attachment or judgment Lien not constituting an Event of Default; (i) presently existing or hereinafter created Liens in favor of the Purchaser, the Issuer or the Indenture Trustee; and (j) presently existing or

 

Annex A to

Loan Sale Agreement

 

 

hereinafter created Liens on personal property or Equipment which are subordinate to or pari passu with the Liens in favor of the Purchaser, the Issuer or the Indenture Trustee.

 

“Person” means any individual, sole proprietorship, partnership, joint venture, unincorporated organization, trust, association, corporation (including a business trust), limited liability company, institution, public benefit corporation, joint stock company, or government or any agency or political subdivision thereof, or any other entity of whatever nature.

 

“Precomputed Loan” means any Loan under which the portion of a payment allocable to earned interest (which may be referred to in the related Loan as an add-on finance charge) and the portion allocable to principal are determined according to the sum of periodic balances, the sum of monthly payments or any equivalent method or are monthly actuarial loans.

 

“Purchase Amount” means, as of the close of business on the last day of a Collection Period, an amount equal to the Loan Value of the applicable Loan, as of the first day of the immediately following Collection Period (or, with respect to any applicable Loan that is a Defaulted Loan, as of the day immediately prior to such Loan becoming a Defaulted Loan) plus interest accrued and unpaid thereon as of such last day at a rate per annum equal to the APR for such Loan.

 

“Purchase and Sale Agreement” means the Loan Purchase and Sale Agreement dated as of March 21, 2012, by and between the Transferor and the Issuer as the same may be amended from time to time.

 

“Purchaser” is defined in the preamble to the Sale Agreement.

 

“Purchaser Indemnified Person” is defined in Section 5.1 of the Sale Agreement.

 

“Records” means all documents, books, records and other information (including computer programs, tapes, disks, data processing software and related property and rights) prepared and maintained by the Seller, the Servicer, any Sub-Servicer or the Issuer with respect to the Loans, the other CEF Assets, the Related Security and the Obligors thereunder.

 

“Recoveries” means, with respect to any Loan, monies collected in respect thereof, from whatever source (other than from the sale or other disposition of the Equipment), in any Collection Period after the Loan Value of such Loan became zero.

 

“Redemption Date” is defined in the Indenture.

 

“Related Documents” means the Sale Agreement, the Purchase and Sale Agreement, the Servicing Agreement, the Intercreditor Agreement, the Issuer Limited Liability Company Agreement, the CEF Limited Liability Company Agreement, the Administration Agreement, the Indenture, and all other agreements, instruments, and documents and including all other pledges, powers of attorney, consents, assignments, contracts, notices, and all other written matter whether heretofore, now or hereafter executed by or on behalf of any Person, or any employee of any Person, and delivered in connection with any of the foregoing. Any reference in the foregoing documents to a Related Document shall include all Appendices thereto, and all amendments, restatements, supplements or other modifications thereto, and shall refer to such

 

Annex A to

Loan Sale Agreement

 

 

Related Document as the same may be in effect at any and all times such reference becomes operative.

 

“Related Security” means with respect to any Loan: (a) any interest (including security interests), if any, in the related Equipment; (b) all guarantees, insurance or other agreements or arrangements of any kind from time to time supporting or securing payment of such Loan (including rights (if any) to receive proceeds on insurance policies covering the Obligors); and (c) all Records relating to such Loan.

 

“Sale Agreement” means the Loan Sale Agreement, dated March 21, 2012, between GE Capital and the Purchaser, as the same may be amended or supplemented from time to time.

 

“Scheduled Payment” on a Loan means that portion of the payment required to be made by the Obligor during any Collection Period sufficient to amortize the loan balance under (x) in the case of a Precomputed Loan, the actuarial method or (y) in the case of a Simple Interest Loan, the simple interest method, in each case, over the term of the Loan and to provide interest at the APR.

 

“Schedules of Loans” means the schedule of Loans attached as Schedule I to the Sale Agreement (which may be in the form of microfiche, floppy disk, CD-ROM or other electronic medium).

 

“Securities Act” means the provisions of the Securities Act of 1933, 15 U.S.C. Sections 77a et seq., and any regulations promulgated thereunder.

 

“Securities Exchange Act” means the provisions of the Securities Exchange Act of 1934, 15 U.S.C. Sections 78a et seq., and any regulations promulgated thereunder.

 

“Seller” means GE Capital, in its capacity as a seller hereunder, and its successors and assigns.

 

“Servicer” means General Electric Capital Corporation in its capacity as Servicer under the Servicing Agreement, or any other Person designated as a Successor Servicer under such agreement.

 

“Servicing Agreement” means the Servicing Agreement dated as of March 21, 2012, by and between the Issuer and the Servicer, as the same may be amended or supplemented from time to time.

 

“Servicing Fee” is defined in the Servicing Agreement.

 

“Simple Interest Loan” means any Loan under which the portion of a payment allocable to interest and the portion allocable to principal is determined by allocating a fixed level payment between principal and interest, such that such payment is allocated first to the accrued and unpaid interest at the Annual Percentage Rate for such Loan on the unpaid principal balance and the remainder of such payment is allocable to principal.

 

Annex A to

Loan Sale Agreement

 

 

“Solvent” means, with respect to any Person on a particular date, that on such date (a) the fair value of the property of such Person is greater than the total amount of liabilities, including contingent liabilities, of such Person; (b) the present fair salable value of the assets of such Person is not less than the amount that will be required to pay the probable liability of such Person on its debts as they become absolute and matured; (c) such Person does not intend to, and does not believe that it will, incur debts or liabilities beyond such Person’s ability to pay as such debts and liabilities mature; and (d) such Person is not engaged in a business or transaction, and is not about to engage in a business or transaction, for which such Person’s property would constitute an unreasonably small capital. The amount of contingent liabilities (such as Litigation, guaranties and pension plan liabilities) at any time shall be computed as the amount that, in light of all the facts and circumstances existing at the time, represents the amount that can reasonably be expected to become an actual or matured liability.

 

“Stock” means all shares, options, warrants, membership interests in a limited liability company, general or limited partnership interests or other equivalents (regardless of how designated) of or in a corporation, partnership or equivalent entity whether voting or nonvoting, including common stock, preferred stock or any other “equity security” (as such term is defined in Rule 3a11-1 of the General Rules and Regulations promulgated by the Securities and Exchange Commission under the Securities Exchange Act).

 

“Stockholder” means, with respect to any Person, each holder of Stock of such Person.

 

“Sub-Servicer” means any Person with whom the Servicer enters into a Sub-Servicing Agreement.

 

“Sub-Servicing Agreement” means any written contract entered into between a Servicer and any Sub-Servicer pursuant to and in accordance with the Servicing Agreement.

 

“Subsidiary” means, with respect to any Person, any corporation or other entity (a) of which securities or other ownership interests having ordinary voting power to elect a majority of the board of directors or other Persons performing similar functions are at the time directly or indirectly owned by such Person or (b) that is directly or indirectly controlled by such Person within the meaning of control under Section 15 of the Securities Act.

 

“Successor Servicer” is defined in Section 6.2 of the Servicing Agreement.

 

“Transfer Date” is defined in the Indenture.

 

“Transferor” means CEF Equipment Holding, L.L.C. a Delaware limited liability company, as seller under the Purchase and Sale Agreement.

 

“UCC” means, unless the context otherwise requires, the Uniform Commercial Code as in effect in the relevant jurisdiction, as amended from time to time.

 

SECTION 2.         Other Interpretive Matters. All terms defined directly or by incorporation in the Sale Agreement shall have the defined meanings when used in any certificate or other document delivered pursuant thereto unless otherwise defined therein. For purposes of the Sale Agreement (including in this Annex A) and all related certificates and other documents, unless

 

Annex A to

Loan Sale Agreement

 

 

the context otherwise requires: (a) accounting terms not otherwise defined in such Agreement, and accounting terms partly defined in such Agreement to the extent not defined, shall have the respective meanings given to them under generally accepted accounting principles; and unless otherwise provided, references to any month, quarter or year refer to a fiscal month, quarter or year as determined in accordance with GE Capital’s fiscal calendar; (b) terms defined in Article 9 of the UCC and not otherwise defined in such Agreement are used as defined in that Article; (c) references to any amount as on deposit or outstanding on any particular date means such amount at the close of business on such day; (d) the words “hereof,” “herein” and “hereunder” and words of similar import refer to such Agreement (or the certificate or other document in which they are used) as a whole and not to any particular provision of such Agreement (or such certificate or document); (e) references to any Section, Schedule or Exhibit are references to Sections, Schedules and Exhibits in or to such Agreement (or the certificate or other document in which the reference is made), and references to any paragraph, subsection, clause or other subdivision within any Section or definition refer to such paragraph, subsection, clause or other subdivision of such Section or definition; (f) the term “including” means “including without limitation”; (g) references to any law or regulation refer to that law or regulation as amended from time to time and include any successor law or regulation; (h) references to any agreement refer to that agreement as from time to time amended, restated or supplemented or as the terms of such agreement are waived or modified in accordance with its terms; (i) references to any Person include that Person’s successors and assigns; and (j) headings are for purposes of reference only and shall not otherwise affect the meaning or interpretation of any provision hereof.

 

Annex A to

Loan Sale Agreement

 

 

Table of Contents

 

		Page
ARTICLE I     DEFINITIONS AND INTERPRETATION
Section 1.1	Definitions	1
Section 1.2	Rules of Construction	1
ARTICLE II    SALES OF CEF ASSETS
Section 2.1	Sale of CEF Assets	1
Section 2.2	Grant of Security Interest	2
Section 2.3	Sale Price	2
ARTICLE III   CONDITIONS PRECEDENT
Section 3.1	Conditions to Sale	3
ARTICLE IV   REPRESENTATIONS, WARRANTIES AND COVENANTS
Section 4.1	Representations and Warranties of the Seller	4
Section 4.2	Affirmative Covenants of the Seller	5
Section 4.3	Negative Covenants of the Seller	7
ARTICLE V    INDEMNIFICATION
Section 5.1	Indemnification	7
ARTICLE VI   MISCELLANEOUS
Section 6.1	Notices	8
Section 6.2	No Waiver; Remedies	9
Section 6.3	Successors and Assigns	10
Section 6.4	Termination; Survival of Obligations	10
Section 6.5	Complete Agreement; Modification of Agreement	10
Section 6.6	Amendments and Waivers	10
Section 6.7	Governing Law; Consent to Jurisdiction; Waiver of Jury Trial	11
Section 6.8	Counterparts	12
Section 6.9	Severability	12
Section 6.10	Section Titles	12
Section 6.11	No Setoff	12
Section 6.12	Confidentiality	12
Section 6.13	Further Assurances	12
Section 6.14	Accounting Changes	13
Section 6.15	Limitation on Payments	13

 

Loan Sale Agreement

 

 

Table of Contents

(continued)

  

		Page
Schedule 4.1(b)	UCC Information
Schedule I	Schedule of GECC Loans
Exhibit 4.2(f)	Separate Identity Provisions
Annex A:	Definitions and Interpretation

 

Loan Sale Agreement